Amazon is paying the publishers for each book that is loaned out, but publishers also want a a say in how their books are used

November has been a huge month for Amazon with the addition of the Kindle Owners' Lending Library to Amazon Prime memberships and the release of its first Kindle Fire tablet just yesterday. But with much success comes a few bumps in the road, and the Authors Guild is working to provide such obstacles in Amazon's road to success.

According to the Authors Guild, Amazon blatantly disregarded the wishes of some U.S. trade book publishers by offering their books in the Kindle Owners' Lending Library after they denied Amazon this privilege.

The Authors Guild's statement on its website described Amazon's process of approaching large U.S. book publishers earlier this year for permission to offer their books in the lending program. According to the Authors Guild, the six largest U.S. book publishers -- Random House, Simon & Schuster, Penguin, HarperCollins, Hachette, and Macmillan -- turned Amazon down. None of the Big Six's books are in the lending library.

Amazon reportedly went to the next tier of book publishers to seek permission from them, and many rejected its request.

But the Authors Guild notes that Amazon disregarded these rejections and placed books from these publishers into the lending library anyway. It said Amazon got away with this by twisting the interpretation of contracts the online retailer has with publishers. According to Amazon's supposed understanding of these contracts, it's only required to pay publishers the wholesale price of the books downloaded, so it can sell e-books at any price (including giving them away) as long as it pays the publishers.

As it turns out, Amazon is paying the publishers for each book that is loaned out. However, the point that the Authors Guild is making is that publishers don't just want money -- they want a say in how their books are used as well.

"From our understanding of Amazon's standard contractual terms, this is nonsense," said the Authors Guild. "Publishers did not surrender this level of control to the retailer. Amazon's boilerplate terms specifically contemplate the sale of e-books, not giveaways, subscriptions, or lending (Amazon does have a lending program that some publishers have authorized, but it's a program that allows customers -- not Amazon -- to lend their puchased e-books)."

The Authors Guild instructed authors who have found their books in Amazon's Kindle Owners' Lending Library against their permission to contact their publisher as well as the Authors Guild's attorneys.

In other related news, The Christian Science Monitor reported yesterday that the Kindle Fire tablet could top 5 million sales in two months. With a hit on Amazon's hands, which could expedite the success of the Kindle Owners' Lending Library, publishers have a heavy battle ahead of them.

Publishers and Author's Guild (read Labour Union) are afraid to death about this program as it would mean total loss of control over distribution channels. Because if Amazon will monopolize distribution channel, it would be able to dictate terms of engagement from that point forward.That's why, even if they are being paid full price for what is essentially a rental to the end users, they see it potentially as the end of the game.From Amazon perspective this is about wrestling this control and achieving dominant position in the book business (not that they already are not enjoying top place with no contender in sight). Barnes & Noble will not be able to match this program, as they can not afford to subsidize such a huge expense. Apple may tag along but they have a limited audience (not everyone can or want to afford iPad). Google is too busy fighting too many wars to dare to open another front.

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